Thread: Financing a mower?

You think no one is profiting off of 0%? Why would someone offer 0%? First, to get 0% you are paying full retail, no discount. Second, statistics show that 88% of people will not pay that loan off in time and start paying the outrageous interest rate that dates all the way back to when the loan originated. Bottom line, banks will get money.

This isn't always the case. Our Walker's were discounted by $600 each and we still received 0% for 48. Maybe because we have a good relationship with both the dealership and finance company, it never hurts to explore all options when purchasing equipment.

does it really matter though? because if you buy a mower and finance.. you can still walk if you don't like the price.. i'm sure they want to sell a mower! weather the money comes from the finance company or your pocket its still green right?? lol.

Quote:

Originally Posted by jrs.landscaping

This isn't always the case. Our Walker's were discounted by $600 each and we still received 0% for 48. Maybe because we have a good relationship with both the dealership and finance company, it never hurts to explore all options when purchasing equipment.

That was my point. We called around for prices and took the lowest to our sales rep. He beat the price AND got us 0% interest. In the end they are salesmen and want to move product and want you to return as a customer.

Ok all money is green but why would you want to pay more of it? The guy is just starting and wants an opinion on wether or not to finance. My opinion is no, he can buy that mower for 2000 and run it until he has the money or need to buy another. Yes you get a warranty on a new mower but that mower is less likely to break down. Why not pay two grand for a mower that will last you a few years. Hell if the motor blows up he can get a new motor for another 2 grand versus the 8 grand for a new one. I paid cash for my first used mower and ran it for 3 years with no problems.

He is also using half of his operating budget on one purchase. Not only does financing allow him to keep that money for operating expenses it allows him to build credit with his new business. I am only assuming he can make the payments and have the lien paid off before the 0% offer expires. If he doesn't have enough coming in to make the payments and maintain an operating budget I agree he should buy a used mower and build from there.

You think no one is profiting off of 0%? Why would someone offer 0%? First, to get 0% you are paying full retail, no discount. Second, statistics show that 88% of people will not pay that loan off in time and start paying the outrageous interest rate that dates all the way back to when the loan originated. Bottom line, banks will get money.

The type of 0% you are talking about is unsecured credit card promotional offers. This is not the same as 0% on a secured loan such as a mower. There are also different type of 0% credit card offers. One is a promo offer to get you to get a credit card from a certain company. These are teaser rates and only apply for the first few months of purchases. Card companies also offer 0% balance transfers which they generally charge you either a flat fee or a percentage of the balance.

Store credit cards offer 0% interest for 6, 12, or even up to 24 months. I'll use Home Depot as an example. They offer 0% for 6 months on purchases over $299 on their Home Depot Card. If you pay that off within the 6 months you do not pay the interest. That interest does not just disappear. The store pays that interest to the bank. If you do not pay it off within the 6 months you get hit with all the accrued interest from the date the purchase was made. It is a win win for the bank. They get paid either way. The store is betting you will not pay off the purchase and therefore the store will be absolved of paying the interest. In the event you do pay it off the store looks at that as a small price to pay for the revenue that was generated by the purchase.

I would like to see a link to your 88% statistic. I did a quick search and could not find that number.

Banks make money on 0% secured loans by dealers buying down your rate. For instance 0% car loans the rebates get sent to the bank from the dealer. If you get 0% or a standard loan it is generally a wash. You will end up paying the same amount over the life of the loan. On mower loans, the amounts are much lower as compared to vehicles so banks do not make as much. In some cases the banks do not make much if any more than the loan origination fee. That is also why loans with little collateral are much harder to get. You need much better credit to get 0% on a mower loan than you do for a vehicle loan. Regardless though, you need very good credit to qualify for 0% from any company be it secured or unsecured.

My 0% loan on my mower was a good deal for me. If you can qualify for 0% on a mower it will probably be a good deal for you too.